Thales (FR:HO)
:HO
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Thales
(HO)
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Rating:70Outperform
Price Target:
€294.00
▲(11.11% Upside)
Action:ReiteratedDate:03/06/26
The score is driven primarily by solid underlying financial performance and a constructive, guidance-backed earnings outlook (strong growth and margin targets supported by orders/backlog and cash generation). This is tempered by weak current price trend versus major moving averages and a valuation that looks relatively expensive given a modest dividend yield.
Positive Factors
Order Backlog & Defence Momentum
A EUR 42bn backlog and book-to-bill >1 provide multi-year revenue visibility, de‑risking near-term top‑line and enabling production planning. Large defence awards and repeat flagship contracts support durable revenue streams, smoothing cycles and underpinning sustained cash generation over 2–6 months and beyond.
Negative Factors
Cyber & Digital Underperformance
Weakness and integration headwinds in Cyber & Digital erode a high‑margin growth pillar and compress group profitability if recovery is slow. Persistent staffing and integration issues can reduce recurring software/services revenues, heightening execution risk and limiting diversification of future cash flows.
Read all positive and negative factors
Positive Factors
Negative Factors
Order Backlog & Defence Momentum
A EUR 42bn backlog and book-to-bill >1 provide multi-year revenue visibility, de‑risking near-term top‑line and enabling production planning. Large defence awards and repeat flagship contracts support durable revenue streams, smoothing cycles and underpinning sustained cash generation over 2–6 months and beyond.
Read all positive factors
Thales (HO) vs. iShares MSCI France ETF (EWQ)
Market Cap
€50.91B
Dividend Yield1.66%
Average Volume (3M)286.98K
Price to Earnings (P/E)28.2
Beta (1Y)0.78
Revenue Growth11.16%
EPS Growth-50.57%
CountryFR
Employees78,189
SectorGeneral
Sector StrengthN/A
IndustryAerospace & Defense
Share Statistics
EPS (TTM)5.27
Shares Outstanding205,941,910
10 Day Avg. Volume232,579
30 Day Avg. Volume286,977
Financial Highlights & Ratios
PEG Ratio1.57
Price to Book (P/B)5.93
Price to Sales (P/S)2.13
P/FCF Ratio17.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€308.00Price Target Upside16.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)10.55
Revenue Forecast (FY)€23.68B
Thales Business Overview & Revenue Model
Company Description
Thales S.A. provides various solutions for civilian and military customers in the aeronautics, space, defense, security, ground transportation, and digital security markets worldwide. It operates through Aerospace, Transport, Defence & Security, a...
How the Company Makes Money
Thales makes money primarily by selling complex, mission-critical products and long-cycle programs and by providing recurring services tied to those products. A large portion of revenue comes from government and institutional customers (notably de...
Thales Earnings Call Summary
Earnings Call Date:Mar 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call portrays a predominantly positive performance: record order intake, strong organic sales growth (+8.8%), improved margins (adjusted EBIT +13% to EUR 2.7bn; margin 12.4%), exceptional free cash flow generation (+27% to EUR 2.6bn) and reduced net debt (EUR 1.6bn). Strategic moves (space MoU, SAMP/T NG wins) and sustained R&D/AI investment underpin medium-term growth. Main negatives are underperformance and integration drag in Cyber & Digital, FX and one-off financial impacts, a French tax surcharge recurrence, higher near-term CapEx, and regulatory uncertainty around the proposed space JV. Overall, highlights materially outweigh the lowlights, supporting a positive outlook provided Cyber recovers as management expects.Positive Updates
Record Order Intake and Strong Commercial Momentum
Order intake reached EUR 25.3 billion (matching 2024 record). Book-to-bill was 1.14 at group level and 1.24 for Defence. Defence orders totaled EUR 15.1 billion with 28 orders > EUR 100m (20 in Defence). Backlog stood at EUR 42 billion (≈3.4 years of sales), supporting near-term visibility.
Negative Updates
Cyber & Digital Underperformance and Integration Headwinds
Cyber & Digital sales were broadly flat organically. Cyber Products declined low single-digit organically (impact from Imperva salesforce merger / higher staff turnover until Q3); Cyber Services down double-digit (soft Australian market). Payment card volumes remained low. Management expects gradual recovery in 2026 but the segment weighed on group performance in 2025.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Order Intake and Strong Commercial Momentum
Order intake reached EUR 25.3 billion (matching 2024 record). Book-to-bill was 1.14 at group level and 1.24 for Defence. Defence orders totaled EUR 15.1 billion with 28 orders > EUR 100m (20 in Defence). Backlog stood at EUR 42 billion (≈3.4 years of sales), supporting near-term visibility.
Read all positive updates
Company Guidance
Thales guided 2026 to a book‑to‑bill above 1, group organic sales growth of 6–7% (implying sales of €23.3–23.6bn including FX), an adjusted EBIT margin of 12.6–12.8%, and free operating cash‑flow conversion of 95–100% (versus a 2024–28 target average of 95–105%); CapEx is expected around €820–850m (~3–3.5% of sales), net debt stood at €1.6bn at end‑2025, the Board will propose a €3.90 dividend (+5.5%, c.40% payout), and divisional phasing assumes Defence growing high single‑digit (backlog €42bn, ~3.4 years of sales), Aerospace mid‑single‑digit (avionics mid‑single‑digit) and Cyber & Digital mid‑single‑digit overall (cyber above, digital lower), while management reiterated the 2028 ambition of roughly 13–14% EBIT margin; note also an expected French tax surcharge impact of ~€90m in 2026.Thales Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.14B | 20.58B | 18.43B | 17.57B | 16.19B |
| Gross Profit | 5.85B | 5.37B | 4.77B | 4.46B | 4.03B |
| EBITDA | 3.31B | 2.67B | 2.46B | 2.29B | 2.17B |
| Net Income | 1.67B | 1.42B | 1.02B | 1.12B | 1.09B |
Balance Sheet | |||||
| Total Assets | 39.16B | 39.99B | 38.79B | 34.42B | 32.84B |
| Cash, Cash Equivalents and Short-Term Investments | 4.49B | 4.77B | 4.08B | 5.30B | 5.05B |
| Total Debt | 6.13B | 7.82B | 8.43B | 5.47B | 5.92B |
| Total Liabilities | 31.17B | 32.43B | 31.82B | 27.04B | 26.12B |
| Stockholders Equity | 7.97B | 7.52B | 6.83B | 7.17B | 6.48B |
Cash Flow | |||||
| Free Cash Flow | 2.63B | 2.01B | 970.80M | 2.56B | 2.26B |
| Operating Cash Flow | 3.32B | 2.64B | 1.60B | 3.06B | 2.71B |
| Investing Cash Flow | -909.80M | -62.80M | -4.23B | -1.21B | -493.40M |
| Financing Cash Flow | -2.66B | -2.00B | 1.59B | -1.77B | -2.17B |
Thales Technical Analysis
Positive
264.60
Price Trends
253.27
Positive
247.71
Positive
245.19
Positive
Market Momentum
4.75
Negative
55.86
Neutral
67.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:HO, the sentiment is Positive. The current price of 264.6 is above the 20-day moving average (MA) of 256.25, above the 50-day MA of 253.27, and above the 200-day MA of 245.19, indicating a bullish trend. The MACD of 4.75 indicates Negative momentum. The RSI at 55.86 is Neutral, neither overbought nor oversold. The STOCH value of 67.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:HO.
Thales Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | €117.74B | 17.32 | 51.15% | 0.97% | 14.19% | 161.87% | |
70 Outperform | €50.91B | 28.20 | 22.17% | 1.66% | 11.16% | -50.57% | |
70 Outperform | €24.13B | 21.87 | 12.93% | 1.74% | 29.91% | -2.24% | |
66 Neutral | €134.24B | 30.00 | 21.22% | 1.53% | 7.05% | 54.98% | |
57 Neutral | €2.05B | 464.07 | 1.12% | ― | 29.80% | ― | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
43 Neutral | €207.37M | -1.98 | -22.05% | ― | 8.61% | -216.67% |
* General Sector Average
FR:HO
Thales
242.00
-4.90
-1.99%
FR:EXA
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182.79%
FR:AIR
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166.24
29.92
21.95%
FR:AM
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304.80
8.18
2.76%
FR:LAT
Latecoere
0.02
<0.01
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FR:SAF
SAFRAN SA
272.50
55.55
25.60%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.